Most harm is unintentional. Most people are well-meaning. But almost everyone can rationalize their own behavior. Plus: why housing affordability is upstream of everything, and why AI fear is shaped by the internet’s mixed legacy.
You always do a wonderful job of using logic to explain things. Just one problem. Sometimes it doesn't.
Nostalgia: "a sad pleasure experienced in recalling what no longer exists"
What we are currently living through under Trump risks all of what you describe as irrelevant.
I'm 74 and my father was born in 1909. He survived the death of his father and the resultant poverty from age 13. The Great Depression was real and finding a job was impossible for him. He enlisted at age 30 in 1939 while his relatives, still in Poland were being murdered. We still have the letters from those trying to escape the Nazi regime. One death is a tragedy. Six million is unimaginable.
Here is a piece of wisdom I was left with not so wisffully uttered: "Nobody wakes up thinking that some horrible things will happen in their lifetime and then they do. Never rationalize. Act."
Collectively, "housing affordability" may explain some American angst. But it too is a mere distraction given the horror show we are living through.
You may be whistling past the graveyard Mr. Housel. These just could be the "good 'ol days."
It is not AI that I fear, but the people who don't.
Correction for you: "An iron rule of math is that 50% of the population has to be below average. It’s true for income, intelligence, health, wealth, everything. And it’s a brutal reality in a world where social media stuffs the top 1% of moments of the top 1% of people in your face."
I slightly disagree with your premise.
"Average" should be changed to "Median." In a data set with 1, 98, and 99, the average is 66. There is only 33% of the population under 66. By definition, there are equal numbers of the population above and below the median. The differentiation is important when you consider things like the average versus median 401(K) balances (where high balance savers skew the average). In this example, the population average is way higher than the median (more than 50% below the average).
In your example, the top 1% are probably pissing off a lot more more than 50%. Thoughts?
the ironic thing about cycles is the discrepancy between what is actually likely to happen next, vs the belief of what is likely to happen next. Largely because mental prediction models based on what IS happening currently completely fail to ignore the impact of what is currently happening on what is likely to happen next. For example, in the housing market, when demand outweighs supply, prices shoot up, and new building accelerates. Buyers and investors and builders alike assume, since prices are rising, that prices will continue to rise. Did I mention that mental prediction models are simplistic like that? lol
However, since a large number of new housing becoming availability tends to coincide, due to the amount of time it takes to build those houses, with a cooling off of the surge in demand rather than the growing period of it.
Think also of a pendulum. When the pendulum is swinging farthest to one side, convincing people that things are heading wildly out of balance and will likely to continue to do so (simply because they have been for the past few years), most people are missing the 30,000 foot view (or perhaps the 30 year view?) that the farther a pendulum gets from the center, the less kinetic energy it has in the direction it has been heading during that previous time, and the more potential energy it has built to swing back the other direction.
I also heard this expression: "hard times create strong people, strong people create good times, good times create weak people, weak people create hard times", and so on and so forth...
Reminds me of a sentence, maybe from you re risks/uncertainty when people think things are ok: uncertainty is a given; rather it’s investors’ complacency that fluctuates. In fact, when one cannot spot uncertainty, it is typically due to a lack of imagination.
While I agree with the broader point about the Internet having both negative and positive influences, I don't believe the relationship between electricity, aeroplanes, refrigeration, etc. is like for like with the Internet.
All previous mass communication tools, including the printing press, radio, and television, brought with them many of the same debates and problems we're seeing with the Internet. As with guns, it's humans who ultimately dictate whether these technologies will be used for good or bad, however subjective that may be. There may just be an amplification with the internet due to its ease of reach.
Not sure I agree since I think perception plays more of a role. Prior to WWII less than a 50% of people owned their own house and being a home owner did result in having more kids as far as I can tell. It is only after the big post-WWII surge that home ownership got to the present level of 65% (which has been roughly steady for a few decades). If folks in the recent past had families without owning their own home why is it such a big deal now? I think it comes down to people's perception of what they think they need rather than what really is necessary. I have read that cost of all hosuing (including rental) per square foot is roughly constant for decades (adjusting for inflation). Therefore, I don't buy that it is an actual problem and is more of a desire than need.
I will agree that initial age of first buy has risen and that on the face of it is not good, but then housing has gotten so much bigger and fancier that it is hard to compare across something as recent as 30 years ago, which I think is at least partly why there is a delay in buying first home.
I grew up in rented home - there was no individual home ownership - and there were 8 in a ~2200 sq ft house. It was common back then.
We've added 120 million people to the country since 1980, practically all of it via immigration, as Americans have voted for population stability with their reproductive practices for some time.
Also, houses are not fungible goods. You're buying access to economic hubs, amenities, and safe pleasant neighbors as well. Housing is more a positional good. If you build out supply so that anybody can live there, then anybody will live there, and people will still bid prices up to keep out the riffraff, and this happens at all points on the socioeconomic ladder.
Really sharp observation about housing being upstream of everything else. The jump from age 29 to 40 for first-time buyers isn't just a housing stat, it rewrites the entire lifecycle timeline. When I look at friends who got priced out, the ripple efects go way beyond finance into relationships and life choices. The political will to actually build millions of homes just isn't ther yet though.
Very sorry to learn about your back, especially it started at such a young age. I have a somewhat chronic lower back issue (L3-L5), but I’m lucky this injury happened much later in life. Keep up the great work!
You always do a wonderful job of using logic to explain things. Just one problem. Sometimes it doesn't.
Nostalgia: "a sad pleasure experienced in recalling what no longer exists"
What we are currently living through under Trump risks all of what you describe as irrelevant.
I'm 74 and my father was born in 1909. He survived the death of his father and the resultant poverty from age 13. The Great Depression was real and finding a job was impossible for him. He enlisted at age 30 in 1939 while his relatives, still in Poland were being murdered. We still have the letters from those trying to escape the Nazi regime. One death is a tragedy. Six million is unimaginable.
Here is a piece of wisdom I was left with not so wisffully uttered: "Nobody wakes up thinking that some horrible things will happen in their lifetime and then they do. Never rationalize. Act."
Collectively, "housing affordability" may explain some American angst. But it too is a mere distraction given the horror show we are living through.
You may be whistling past the graveyard Mr. Housel. These just could be the "good 'ol days."
It is not AI that I fear, but the people who don't.
Hi Morgan. I love your work.
Correction for you: "An iron rule of math is that 50% of the population has to be below average. It’s true for income, intelligence, health, wealth, everything. And it’s a brutal reality in a world where social media stuffs the top 1% of moments of the top 1% of people in your face."
I slightly disagree with your premise.
"Average" should be changed to "Median." In a data set with 1, 98, and 99, the average is 66. There is only 33% of the population under 66. By definition, there are equal numbers of the population above and below the median. The differentiation is important when you consider things like the average versus median 401(K) balances (where high balance savers skew the average). In this example, the population average is way higher than the median (more than 50% below the average).
In your example, the top 1% are probably pissing off a lot more more than 50%. Thoughts?
Thanks for sharing
"When times are bad they get fed up and say, “Enough of this.” And I think we’re not far from that today.".
What about the (more than) half the country that voted for this?
the ironic thing about cycles is the discrepancy between what is actually likely to happen next, vs the belief of what is likely to happen next. Largely because mental prediction models based on what IS happening currently completely fail to ignore the impact of what is currently happening on what is likely to happen next. For example, in the housing market, when demand outweighs supply, prices shoot up, and new building accelerates. Buyers and investors and builders alike assume, since prices are rising, that prices will continue to rise. Did I mention that mental prediction models are simplistic like that? lol
However, since a large number of new housing becoming availability tends to coincide, due to the amount of time it takes to build those houses, with a cooling off of the surge in demand rather than the growing period of it.
Think also of a pendulum. When the pendulum is swinging farthest to one side, convincing people that things are heading wildly out of balance and will likely to continue to do so (simply because they have been for the past few years), most people are missing the 30,000 foot view (or perhaps the 30 year view?) that the farther a pendulum gets from the center, the less kinetic energy it has in the direction it has been heading during that previous time, and the more potential energy it has built to swing back the other direction.
I also heard this expression: "hard times create strong people, strong people create good times, good times create weak people, weak people create hard times", and so on and so forth...
Reminds me of a sentence, maybe from you re risks/uncertainty when people think things are ok: uncertainty is a given; rather it’s investors’ complacency that fluctuates. In fact, when one cannot spot uncertainty, it is typically due to a lack of imagination.
While I agree with the broader point about the Internet having both negative and positive influences, I don't believe the relationship between electricity, aeroplanes, refrigeration, etc. is like for like with the Internet.
All previous mass communication tools, including the printing press, radio, and television, brought with them many of the same debates and problems we're seeing with the Internet. As with guns, it's humans who ultimately dictate whether these technologies will be used for good or bad, however subjective that may be. There may just be an amplification with the internet due to its ease of reach.
Not sure I agree since I think perception plays more of a role. Prior to WWII less than a 50% of people owned their own house and being a home owner did result in having more kids as far as I can tell. It is only after the big post-WWII surge that home ownership got to the present level of 65% (which has been roughly steady for a few decades). If folks in the recent past had families without owning their own home why is it such a big deal now? I think it comes down to people's perception of what they think they need rather than what really is necessary. I have read that cost of all hosuing (including rental) per square foot is roughly constant for decades (adjusting for inflation). Therefore, I don't buy that it is an actual problem and is more of a desire than need.
I will agree that initial age of first buy has risen and that on the face of it is not good, but then housing has gotten so much bigger and fancier that it is hard to compare across something as recent as 30 years ago, which I think is at least partly why there is a delay in buying first home.
I grew up in rented home - there was no individual home ownership - and there were 8 in a ~2200 sq ft house. It was common back then.
We need to hurry and build more housing. That’s the central issue.
We've added 120 million people to the country since 1980, practically all of it via immigration, as Americans have voted for population stability with their reproductive practices for some time.
Also, houses are not fungible goods. You're buying access to economic hubs, amenities, and safe pleasant neighbors as well. Housing is more a positional good. If you build out supply so that anybody can live there, then anybody will live there, and people will still bid prices up to keep out the riffraff, and this happens at all points on the socioeconomic ladder.
Really sharp observation about housing being upstream of everything else. The jump from age 29 to 40 for first-time buyers isn't just a housing stat, it rewrites the entire lifecycle timeline. When I look at friends who got priced out, the ripple efects go way beyond finance into relationships and life choices. The political will to actually build millions of homes just isn't ther yet though.
Very sorry to learn about your back, especially it started at such a young age. I have a somewhat chronic lower back issue (L3-L5), but I’m lucky this injury happened much later in life. Keep up the great work!